Pointing to an increasing trend of private equity firms acquiring physician staffing companies and private emergency transportation companies contracting with hospitals, a key congressional committee announced a bipartisan investigation this week into the practices of private equity firms related to surprise billing.
In letters to KKR & Co., Inc., Blackstone Group, and Welsh, Carson, Anderson, & Stowe, House Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) and Ranking Member Greg Walden (R-OR) requested information and documents pertaining to the firms' ownership of private physician staffing and emergency transportation companies. The letters noted that recent research has demonstrated that these third-party medical providers are the leading sources of surprise medical billing.
"In recent years, the Committee has heard countless heart-wrenching stories from insured individuals who have received thousands of dollars in medical bills after inadvertently receiving care from out-of-network providers," the committee leaders asserted in the letters.
Reps. Pallone and Walden also referenced recent findings from the American Enterprise Institute and the Brookings Institution indicating that surprise bills are frequently associated with services provided by an out-of-network emergency physician or ancillary clinician—such as a radiologist, anesthesiologist, pathologist, hospitalist, or assistant consulting surgeon—at an in-network health facility.
While noting recent press reports on the acquisitions by private equity firms, the letter specifically referenced the acquisition of two of the largest emergency department outsourcing firms in the United States—EmCare and Team Health—by private equity firm KKR & Co. Inc. and Blackstone Group, respectively.
"Evidence indicates that these physician staffing firms charge significantly higher in-network rates than their counterparts, thereby driving reimbursement upwards as they enter into staffing arrangements with hospitals," the letter declared. "We are concerned about the increasing role that private equity firms appear to be playing in physician staffing in our nation's hospitals, and the potential impact these firms are having on our rising health care costs."
The announcement of this investigation could create some momentum for bipartisan legislation—the No Surprises Act—that would attempt to protect patients from surprise medical billing. The bill passed unanimously out of the House Energy and Commerce Committee in July, but House floor action on the bill has yet to be scheduled.
Wilson Sonsini Goodrich & Rosati's FDA Regulatory, Healthcare, and Consumer Products Compliance practice group is actively following these developments. For more information on the items above, please contact Brian Ronholm, David Hoffmeister, Georgia Ravitz, or Jamie Ravitz.
